Small Stores’ Suit Against Big Book Chains Advances

A federal judge Tuesday allowed a lawsuit by independent booksellers to proceed against Barnes & Noble Inc. and Borders Group Inc.

The plaintiffs assert the chains receive illegal preferential treatment from publishers for secret deals and steep discounts.

U.S. District Judge William Orrick Jr. set an April 9 trial in an antitrust suit brought by the New York-based American Bookseller Assn., which represents small, independent bookstores nationwide.

The suit, which represents one side of a legal argument, asserts that the two major book chains, which urged Orrick to throw out the suit, use their weight illegally to demand major discounts from some of the nation’s largest publishers.

That, in turn, undermines mom-and-pop bookstores that cannot acquire the same deals. It’s an allegation that the chains emphatically deny.

Still, the judge said that while the 26 suing independent booksellers represented by the ABA could have their day in court, they cannot win damages if they prevail. Orrick said it would be impossible to determine how much the independents were harmed by alleged anticompetitive practices.

“While we are disappointed regarding the judge’s ruling on damages, this suit was never about monetary damages,” the ABA said in a statement. “Rather, from the beginning, it has been a fight to ensure that all book retailers play by the same rules on a level playing field.”

Reg Steer, an attorney for Michigan-based Borders, said “there’s not any merit to the claims.”

As major bookstore chains have expanded to new territories in recent years, the number of independent bookstores has declined. From 1994 to 1997, the four largest bookstore chains--Barnes & Noble, Borders, Crown Books and Books-A-Million--expanded their collective market share from 35% to 45%, the ABA said.